Turnkey Solutions for Compensation Modeling

Executive and director compensation has become a major corporate governance concern for investors worldwide. Increased scrutiny due to the perception that executive pay is misaligned with company performance, regulatory requirements for improved disclosure and greater shareholder activism are placing compensation in the spotlight for many companies.

However, equity-based compensation continues to be the preferred way to attract and retain talent, as well as to tightly align pay with company performance. The challenge for compensation professionals and committee members is how to strike the proper balance. Therefore, modeling the cost impact of equity-based compensation is a critical element in designing any plan.

For corporate compensation professionals who would like hands-on assistance as they model these critical plans, RiskMetrics Group offers Compensation Advisory. This service includes a baseline valuation run to determine the Shareholder Value Transfer (SVT) cost of existing equity plans and overhang. Then the corporate solutions team will prepare a series of sensitivity analyses to determine the impact of various plan designs and award types on the SVT cost of a potential new share request.

The corporate solutions team works interactively with you, asking questions, raising concerns and providing input throughout the process.

Benefits of Compensation Advisory 

In addition to helping you model the SVT of your equity plans, the corporate solutions team will:

• Provide input on shareholder expectations relative to burn rate, pay for performance, equity plan design, and qualitative factors
• Work with you to review multiple versions of the plan document as needed to help you determine an optimal plan design. 
• Prepare a custom presentation for you to share with your senior management team and board of directors.
• Review a draft of the proxy disclosure relating to your equity plan to ensure all key plan provisions are highlighted and best practices are incorporated

Please contact us for more information about Compensation Advisory.

In accordance with our Business Practices, this solution is delivered by ISS Corporate Services, Inc. (ICS), a wholly owned subsidiary of RiskMetrics Group, Inc.